China Economy Seen Headed for Deeper Contraction on Factory Drop

[F-22Raptor]

China’s economy could be heading for a worse-than-expected first-quarter contraction after the country’s manufacturing sector reported activity was at a record low in February due to the coronavirus outbreak.

The manufacturing purchasing managers’ index plunged to 35.7 in February from 50 the previous month, according to data released by the National Bureau of Statistics on Saturday. Even before that data, the median forecast was that the economy would shrink in the three months through March from the last quarter of 2019, and the surprisingly weak data prompted further cuts to that view.

Gross domestic product may now shrink by 2.5% in the first quarter from the previous period, Nomura Holdings Inc. economists led by Lu Ting said in a report on Saturday after the data release. That was a cut from their previous forecast of -1.5% in a Bloomberg survey last week. Standard Chartered Plc already expected a -1.5% contraction before the data, while Australia & New Zealand Banking Group Ltd. is forecasting a 2% drop, according to reports after the release.

If the economy was to contract, it would be the first time that has happened in comparable data back to 2011.

6% annualized drop in China’s first-quarter gross domestic product. Pimco’s view gels with Goldman Sachs Group Inc. economists who said in a report Friday that global GDP will shrink on a quarterly basis in the first two quarters of this year before rebounding in the second half.

The factory PMI data may improve in March, CICC analysts including Yue Yan wrote in a note on Saturday.

“Strenuous containment measures were taken after the outbreak of COVID-19, which understandably dampened economic activities in the short term,” they wrote. “With the outbreak gradually under control, government agencies have been clearing the unwanted obstacles for production resumption.”

Nomura’s Lu also expects the March PMIs to rebound, but says activity data will be zero or negative as businesses won’t be 100% back.

On a year-on-year comparison, the median forecast for first-quarter GDP growth is 4.3%. That was before Saturday’s data. Nomura and ANZ both now see it rising 2%, while Standard Chartered expects a 2.8% expansion.

https://www.bloomberg.com/news/arti...headed-for-deeper-contraction-on-factory-drop

 

[zectech]

Simply ramp up defense spending if domestic economy is hurt and if exports drop.

Spend as much on defense (ICBMs, 055s, carriers, HGVs) equal to the hundreds of billions USD lost in the economy.

And to sure up the Yuan, buy up silver, gold and platinum. About 1T Yuan worth a year for the next 10 years.

These are new developments and new developments need new ideas. If the West complains, blame the coronavirus and the West not buying enough Chinese goods to end poverty in China.

China has to end poverty, having 20-30 CVNs is a way to end poverty and have full employment.

Not China's fault China is going to have the strongest military, especially if China spends on EW.

 

[leviathan]

Trust me, with new OUTBreak everywhere in US. It will be luck for US to not have complete market crush. Regression for US is inevitable, and China might be the only country that can produce shit by end of next month.

 

[beijingwalker]

China’s economy could be heading for a worse-than-expected first-quarter contraction after the country’s manufacturing sector reported activity was at a record low in February due to the coronavirus outbreak.

The manufacturing purchasing managers’ index plunged to 35.7 in February from 50 the previous month, according to data released by the National Bureau of Statistics on Saturday. Even before that data, the median forecast was that the economy would shrink in the three months through March from the last quarter of 2019, and the surprisingly weak data prompted further cuts to that view.

Gross domestic product may now shrink by 2.5% in the first quarter from the previous period, Nomura Holdings Inc. economists led by Lu Ting said in a report on Saturday after the data release. That was a cut from their previous forecast of -1.5% in a Bloomberg survey last week. Standard Chartered Plc already expected a -1.5% contraction before the data, while Australia & New Zealand Banking Group Ltd. is forecasting a 2% drop, according to reports after the release.

If the economy was to contract, it would be the first time that has happened in comparable data back to 2011.

6% annualized drop in China’s first-quarter gross domestic product. Pimco’s view gels with Goldman Sachs Group Inc. economists who said in a report Friday that global GDP will shrink on a quarterly basis in the first two quarters of this year before rebounding in the second half.

The factory PMI data may improve in March, CICC analysts including Yue Yan wrote in a note on Saturday.

“Strenuous containment measures were taken after the outbreak of COVID-19, which understandably dampened economic activities in the short term,” they wrote. “With the outbreak gradually under control, government agencies have been clearing the unwanted obstacles for production resumption.”

Nomura’s Lu also expects the March PMIs to rebound, but says activity data will be zero or negative as businesses won’t be 100% back.

On a year-on-year comparison, the median forecast for first-quarter GDP growth is 4.3%. That was before Saturday’s data. Nomura and ANZ both now see it rising 2%, while Standard Chartered expects a 2.8% expansion.

https://www.bloomberg.com/news/arti...headed-for-deeper-contraction-on-factory-drop

If China goes down, we'll take you down with us. Your economy is just too dependent on China's.

 

[riscol]

I don't think some people realize just how dependent we are on Chinese manufacturing. If activities inside factories come to a halt it basically means products aren't going to get manufactured. Suggesting of shifting factories back to America is unthinkable due to many financial risks attached to it and you would still rely on components from China and i am just leaving labor costs aspect out of the picture. To be cheering for this sort of news as positive sign for the USA is like revealing yourself as an idiot with no brains.

 

[Viva_Viet]

If China goes down, we'll take you down with us. Your economy is just too dependent on China's.

US just take down Hwei, thats enough to destroy CN, u guys can keep selling raw material like rare earth, steel to VN factories and make money like other third world nations who only sell raw material to survive .

Of course no one care abt Cnese sufferring deadly cancers from making toxic things like rare earth-steel. U do the dirty works, then u must pay by ur lives